When it comes to the labor market, it seems the tide is starting to turn. After years of conservative hiring plans, many leaders are once again looking to increase their headcount to meet rising demand. This is a critical moment for organizations, as we are more aware than ever that the success of an organization relies on the talent within it.

As Dr. Klaus Schwab, founder of The World Economic Forum, explains:

“Capital is being superseded by creativity and the ability to innovate – and therefore by human talents – as the most important factors of production. Just as capital replaced manual trades during the process of industrialization, capital is now giving way to human talent. Talentism is the new capitalism.”

One of the key reasons organizations are competing to hire top talent is to drive innovation. And not just the more traditional view of innovation as a driver for new product development. But innovation as a differentiator – both strategic and practical. Yes, strategic innovation is necessary to help companies evolve their offerings to maintain a market edge.

But the same innovation must also occur on a daily basis, at the point of attack. That requires knowledge, experience, and expertise throughout the organization. Despite all of the progress made in computing and the digital world, innovation is still driven by the individual – and that requires top talent. In its absence, organizations are doomed to gravitate toward mediocrity.
And yet that isn’t enough. Engaging the right talent as part of your workforce is only half the battle. Your industry’s best and brightest – the smartest in their field – will fail miserably unless they are given permission to succeed; to think outside the box; to challenge the status quo. And that requires a fundamental shift in how organizations manage and direct their activities. It requires openness, transparency, and a fundamental culture of change.

I am often amazed at how management today is so quick to revert to the leadership styles of the past. Command and control, top down directives where the input has been limited to the privileged few and the culture requires a blind trust to what is asked. Details are kept close to the vest, and the masses are asked to “just do what is asked”. Information is coveted as if it is somehow privileged, creating the very situation where zero visibility is possible.

That style won’t work with today’s talent. Times change, and so to do the cultural expectations of each generation. And in this world where information flows freely and ideas, thoughts, and feelings are shared digitally for all the world to see, the same expectations apply to organizational dynamics.

Good leaders do the opposite. They create a culture where information is a shared asset and leveraged to build trust within the team. They nurture their talent community, and ensure communication is clear and consistent. And most importantly, they give their workforce permission to take risks, to challenge the status quo, and to improve the process (with impunity).

Make no mistake, these fundamental shifts are already underway in the world of work today. And these changes will continue to accelerate as the gap widens in the war for talent. The only way to survive – and ultimately thrive – is to embrace this shift, focus your strategy on talent, and develop a culture where change is the norm and communications are open and transparent.